The Dominion FRIDAY, FEBRUARY 6, 1920. SOME TRADE DANGERS

Dominion, Volume 13, Issue 113, 6 February 1920, Page 6

The Dominion FRIDAY, FEBRUARY 6, 1920. SOME TRADE DANGERS

.At the moment, the position of the exchange market in the United States attracts attention chiefly as imposing an almost intolerable burden on those who have trading or other liabilities to meet in that country. With r 3.31 dollars exchanging for the pound sterling, people in British countries are called upon in effect to pay American creditors thft amount of their debts plus about half as much again. This in itself is far from being a satisfactory state of affairs. It reflects the conditions in which European and other countries aro importing from the United States an immensely greater of commodities than they are able to balance with exports of goods, or raw materials, and means, of course, that theso countries are being penalised heavily for their, failure to achieve such a volume of production as would enable them to exchange goods for goods. The unfavourable .exchange rate, however, is not an unmixed calamity. The only remedies open to those upon whom it now bears so heavily are to expand their home production as far as circumstances will permit, and to divert their trade to countries which offer them a more equitable basis of exchange. It is obvious that the present rate of exchange in America gives other countries the strongest possible incentive to make the most of theso romedies. For practical purposes, the effect of tho exchange rate at the level recorded to-day is the same as if an additional Customs tariff of nearly 50 per cent, were imposed generally on American ; imports entering foreign Theso are the conditions, in any case, in which American exporters must competo with home producers in British markets, and with either home producers or British exporters in the markets of the British Dominions.

.Besides stimulating a return to normal production, the exchange rate thus, as it stands,' establishes a certain safeguard against American trade penetration. It is as well, perhaps, that this is the case, for certain of the export trading plans of the United States arc calculated in themselves to inflict serious and lasting damage on her rivals and competitors, and most of all on countries like New Zealand which are intent on developing secondary industries from comparatively small beginnings. The;nature of these plans is clearly 'indicated in the provisions of the Webb Act to Promote United States Export Trade by Combination, which was approved in April, 1918. The essential purpose of this Act is to remove, so far as export trade is concerned, all the restraints that are imposed by anti-trust legislation on trading operations within the United States. Under its provisions, a majority of the manufacturers engaged in a given branch of oxport trade, or as many of them as control 51 per cent, of its output, are empowered to combine with a view to capturing foreign markets. They are empowered to fix a common price for the goods in which they deal, to undersell competitors for the purpose of gaining a footing, and destroying competition, and, in fact, to use. freely qvery weapon and device of monopolistic trading. In countries where no defence is established against a trading offensive on these lines, the purchasers of American goods will thus be deprived of all the advantages which would arise from normal competition. On the other hand, any export trade from these same countries to America will be exposed to the free and unrestricted play competition. The Webb Act authorises export trading methods which can only bo regarded as, ruthlessly predatory, hut elaborate safeguards are provided against the application of such methods to trading operations within the territory of the United States. . Many of the larger export corporations in America are said to be organising under the Webb .'Vet, and the movement is stated to be sprea'ding fast. The adoption of this policy by the United States all the more djijiands thoughtful consideration in this Dominion and others, since in tho Mother Country there is by no means as strong or assured an impulse as could be desired towards the adoption of the measures by which tho Empire might directly and indirectly dofend its trading interests. The British Government

has taken as yet very short and timid steps in the direction of instituting Imperial preference. An anti-dumping Bill, the Imports and Exports BUI, is under consideration, and if it were passed would give a fairly strong lead in opposition to the monopolistic methods by which the United States is seeking to extend its export trade. Ifc is not certain, however, that the Imports and Exports Bill will pass, or that Britain will actively cooperate with the Dominions in. opposing the trade invasion America has planned. The Bill is roundly denounced by Mil. Asquitii and his followers, and at the recent conference of the Liberal Party at Birmingham one of the Coalition Liberals (Sir William Barton) predicted that the sections of tho party within and outside the _ Coalition would unite in opposition, to its passage. Talcing account also of the attitude of the Labour Party"on the fiscal issue, the prospects of the Bill seem rather dubious. With matters taking this course in Great Britain, it is evidently necessary that tho Dominions should thoughtfully consider such measures as aro calculated to protect themselves against unfair exploitation.

NOTES OF THE DAY

$ In condemning the scheme of the Royal Colonial Institute for training overseas ' students by British manufacturers, the annual conferonce of the Industrial Corporation of New Zealand has shown small wisdom. Everyone will concur in the first portion of its resolution on the subject that "it is the duty of the community to educate and train its own population," but it is difficult to find more short-sighted principle than that adopted in the concluding portion, "that until Ave feel, we are not competent to cducatc or train young men the proposal to send them for special training in another country must be discouraged." Here we are, in a remote corner of the world, endeavouring to build up an industrial community, and the best advice the Industrial Corporation of New Zealand can give us is to condemn the first-hand stud.y of industrial methods and practice abroad. To reject opportunities for such study and training is to turn one's back on progress.

The decision of the Government to take thirty-live of the hundred aeroplanes offered by tho Imperial authorities marks a definite step forward in New Zealand's air policy. • General Sykgs, Chief of the Imperial Air Force, foresees a day when air supremacy may be more vital to maintaining the world's peace than oven sea supremacy. An efficient air force could undoubtedly be made an important factor in the defence of'the Dominion, and, as Genehat, Sykes emphasises in his speech reported in yesterday's cable messages, military aviation and civil aviatioa must go hand-in-hand. . The Post Ofiicc is about to make tentative Experiments in postal air services in the Dominion, but the Government before long will require to go nnich more thoroughly into the question as a whole than it has yet done. In bygone years we concentrated our efforts on an "All-Red Route" for steamship mails to England. To-day it looks as if the time may not be far distant when New Zealand will be called upon to co-operate in establishing an All-Red Air Route.

L\ theso days, with D'Anxunzio organising a melodramatic rebellion in Fiumc in the intervals between his novels, and I'adebewski .appearing as President of Poland, the ordinary eccontricitics of the artistic temperament pale into insignificance. The pijblic, we fear, will take only a lahgttid interest in the report cabled to us that Puccini has shut himself up in a lonely tower to write a new opera. Such an announcement bears too strong a resemblance'to the well-worn story of the actress's stolen jewels which* appears periodically in the Press abroad, accompanied by large portraits of the distressed lady, and full autobiographical details! Puccini's move would have been an effective counter to 'Wagneb's habit of' swathing himself in silks and satins when composing, and decorating his rooms with quantities of the material's, which accompanied him wherever he travelled. The world has, moved a, long way since those clavs, and the only inference a cynical public is likely to draw from Puccixrand his tower will be that thn oneratic Press agency business in Italy is in an undeveloped statci

The suggestion put forward by a correspondent, Mn. Mark Levy, that the Prince of Wales on his arrival in port here, should be brought ashore in one of the large Maori war canoes, manned by Natives, is well worth considering. The idea of erecting a landingstage at Oriental Bay, where there is amnio space _ for a large crowd of welcoming sightseers, is ajso a part of the programme suggested. | should be dealt with on its j merits. The Mavor appears +o hold j the view that the weather here isf tno uncertain to risk a venture ®f j the- nature outlined by Mn. Levy. | Of course there is always some risk ! that the weather may interfere with | an outdoor or seaside function, but on the other hand it may not. There is so much fn be said in favour of the_ landing lwint made at a spot which _ will afford such exeentional facilities for a greet, rntherinn- of citizens to welcome H's F,ov.il Highness, that it nw.v be hoped that tlm nros and eons of the suggestion will be thoroughly gone into.

A satisfactory step towards augmenting tho city's water supply is tho request addressed by Mit. Luke

to the City Engineer to proececl immediately with the tunnel to tap the waters of the Orongorongo River. Mu. Morton's report of last year dealt wji,th both the construction of an .additional dam on the Wainui-o-mata ,and the tapping of j the Ofongorongo. The dam was! estimated to cost £120,000, and the j Orongorongo scheme £80,000. The.' disadvantage attaching to the latter 1 work is that the water will probably j ho discoloured when the river is jp flood. Its manifest advantage is' that the city will be assured°of a' large additional (low of water all! the year round. Mu. Cot,™an I Pim,I,IPS, with groat persistency, for which lie deserves the thanks of the citizens, has directed attention to the danger of the new dan) blocking the route for the Wainui-o-mata de viation of the Wairarapa railway This aspect of the matter, together I with the possibility of pushing ahead with the railway deviation itself, might well be looked into by the Central Progress Leaguo. '